Can someone explain to me why people in the US actually don't think UHC is a good idea?

And what on earth is all this talk of death panels?

Sarah Palin was enough of a joke in Europe before she was heard talking about them never mind after!

Because of the horror at all things government, whether its framed as inefficient or creeping tyranny its always considered the worst possible thing compared with all alternatives.

So called death panels are rationing tools which determine whether or not treatment outcomes justify the costs, for instance would a procedure result in enough quality of life per adjusted anum (Qualis or something like that), its no different a regulatory mechanism than the market and how it prices people out of further services or treatments.

The market just seems natural to Americans and unnatural to Europeans.

You could as easily say could someone explain why people in the UK/EU actually dont think private HC is a good idea? And what on earth is all the talk of people perishing because of health costs.

SUMMARY:
I worked for the third largest Medicaid program in the nation for 4 years as a project manager and database analyst. I managed the actuarial service contract and worked in the bureau where the HMO rates are calculated. The agency's budget was $16 billion per year, and served 2 million Medicaid recipients.

I have seen, analyzed, and researched (millions) of fee-for-service (FFS) claims per year as part of the annual rate development cycle. I have calculated rates for a number of different managed care programs, ranging from standard medical packages, to mental health, to comprehensive packages that even covered nursing home care.

Fee For Service Vs. Managed Care - 101:
It is important to understand that HMO rates, that is the money it costs per member per month (PMPM) are built from FFS claims. Simply put, all the individual claims submitted for every person of a given eligibility group are added together, grouped by category of medivcal servie, and costs averaged out by person. So, in theory, a plan that is paid FFS rates should get approximately the same amount of money for being paid HMO rates, but there is a small discount (around 6-8% taken out of the FFS claims base) because in FFS there is no case management, and in an HMO there is, which results in lower costs per person.

RATE SETTING - 101:
In Medicaid, rates are typically set by (1) eligibility group (TANF or SSI), (2) age, (3) gender, and (4) district (a grouping of contiguous counties). The reasons for splitting the rates up according to the four criteria above are as follows:

(1) Eligibility group:
TANF = Temporary Assistance for Needy Families, mostly composed of young mothers and their children. TANF recipients are generally "young and healthy" and therefore have relatively low costs of care per month, around $200 PMPM. TANF eligibility is automatic for children whose parents income is under a certain threshold, and there is no limit on the cost of care per year that can be spent on anyone under the age of 21.

SSI = Social Security Income, mostly composed of individuals that are disabled or chronically ill. SSI recipients are typically more costly to care for and thus have a higher average PMPM of about $800 per month. People qualifying under SSI eligibility are generally on Medicaid for a long time, if not for life.

(2) Age:
People at different stages of the human life cycle have different health care needs. For instance, newborns are quite expensive to care for. The average cost for labor and delivery of a child under Medicaid is about $10,000. Once children get to a certain age, their health care costs are typically very low, and this is reflected in the HMO rates. Once people get to mid-life and beyond, there will typicaly be an increase in their monthly health care costs as there is a greater amount of utilization of pharmaceuticals to control chronic conditions like high blood pressure, high cholesterol, etc. So, age bands (Under 1 year old, 1-5 years, 6-13 years, 14-25 years, etc.) make sense as a means of grouping similar people for purposes of setting rates.

(3) Gender:
Labor and delivery is expensive, as noted above. Men cannot get pregnant and have babies, women can. Therefore it makes sense to split the rates of the TANF population for people in their childbearing years into one set of rates for men, and another for women for each age band. At around age 55 there is no benefit to splitting the TANF rates into M/F divisions as the probability of pregnancy at that age is relatively low.

(4) District:
No state wants to set rates by county, that would be administratively ridiculous to manage. Generally, there are regions of each state that have similar costs of living and population density. So, it is logical and efficient to group these counties together into "districts" for purposes of simplifying the rate development process. Another benefit in doing so is that in some cases it is possible to group smaller (more rural) counties with larger (more urban) counties and average out the rates between them. This helps the state in keeping spikes in rates from occuring between two regions that geographically close, yet demographically different.
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HMO Operations - 101:
So, what happens next? The FFS delivery system is simple. Any person under that system can go to any doctor at any time and request any service. This is why FFS is the MOST EXPENSIVE sytem of care. One of the main benefits of the HMO (health maintenance organization) model of health care delivery is that a primary care physician (PCP) acts as a "gatekeeper" in managaing the care of their patients, and serving as a moderator in accessing expensive care by specialists and/or expensive diagnostics like MRIs and CAT scans. On average, for a given population of people, HMOs can provide equivalent OR better health care than a FFS system for about 8-15% less money.

What's the problem then?

Consider the following example. I'm a Medicaid HMO. I have 1,000 people enrolled in my plan. Let's say that some of them are TANF and some are SSI, so that my average rate per person per month is $600. Each month I will be paid PROSPECTIVELY (up front) for caring for my 1,000 enrollees. So, if I spend less than $600,000 in caring for my enrollees during that month the rest is PROFIT. That's part of the moral dilemma. When HMO enrollees are denied services, the plan makes money. If the plan can even slow down the delivery of services, they hold onto the money longer, which essentially makes them money due to the time value of money. So why doesn't the state step in if people are being denied services by a plan that was paid up front for caring for them?

PROVE IT.

It's actually very hard to. Why? Because once a HMO gets enrollees, they no longer have to submit FFS claims. They got paid up front, remember? So there is no incentive on their part to submit claims anymore. Technically, by law, they are supposed to submit the equivalent of claims in the form of "encounter data" but the reality is that they usually submit crap encounter data, because they don't want the state to know how much money they are actually making. DARKNESS LIKES SECRECY.

Due to the tight knit elitist relationships between health care lobbyists and elected officials, there is rarely any significant action taken against plans for submitting poor quality encounter data. The states end up adjusting the rate methodlogies by one method or another, but ultimately the actuaries who0 have to certify the rates do what they can and tell the plans that without good encounter data, they can't have the rates certified. But this process takes time, alot of time, during which the HMOs are making money hand over fist at the expense of the U.S. taxpayer.

Government Impacts:
There is a fundamental moral dilemma that occurs when the Hippocratic Oath and a HMO's profits are forced to intersect. How much can the quality of care delivered to patients be lowered to increase plan profits? At what point will people start to bitch? At what point will the government step in because bad shit is happening? There's only one way to find out, and HMO executives set target profits for the year and then crack the whip on mid-level managers and employees to make it happen. Feel like a guinea pig yet?

NOTE: This is the case for FOR PROFIT HMOs. NON-PROFIT HMOs generally have much friendly environments for their enrollees. I belong to a non-profit HMO, and I am very satisfied with my health care.

--------------------------------------------------National Ramifications:
How does this relate to the national health care debate? Simple.

(1) One of the major inefficiencies in the U.S. private health care system is that insurance companies are allowed to cherry pick their enrollment, and also offer vastly different rates to people depending on which "risk pool" they are signing up for coverage under. For instance, when I was working as a software analyst, for my family of four, I paid $600 per month for HMO coverage. When I got my job with the state, the same coverage, in the same HMO only cost me $200 per month.

How is that possible? The plan is assuming the same risk for my family of four that they did before, but now it is OK to pay them 66% less money per month. The answer is that the software company I worked for only had 150 employees. The state has several thousand employees. So, the HMO bends the little software company over the fence and rapes them with high monthly rates, and must kowtow to the state government and offer them great monthly rates in order to secure the large enrollment of people and make their "bread and butter" revenue.

THIS is part of the probelm that CREATES the UNINSURED POPULATION that this new national health care program is supposedly going to help.

IF HMOs were FORCED TO OFFER ACTUARIALLY SOUND RATES TO PEOPLE REGARDLESS OF THEIR EMPLOYER, THE UNISURED POPULATION IN THE U.S. WOULD BE HALF OF WHAT IT IS OR LESS, BECAUSE INSURANCE WOULD BE AFFORDABLE!!!!

(2) Personally, I think private health care organizations should be forced to accept rate structures that are calculated out by an actuarially sound methodology, and certified by third party actuaries. This would create equity in what people are charged for their health care expenses. Small companies, Mom and Pop businesses, independent contractors, these are the people that are the backbone of our nation's economy, and they are being forced out of business or forced to live without health insurance, because the costs are simply too high for them to bear. Workers' Compensation insurance (MANDATORY) is crippling to many small businesses. Health insurance is just about as crippling of an expense. If people are not able to receive bassic medical care, then conditions which are ultimately very managebale can become deadly and of catastrophic cost to manage if they are first treated in an emergency room, instead of in the office of a primary care physician.

(3) I think in principal, univeral health care is the msot desirable delivery system, both for the people and for their government. The insider elitist scum of this nation are ensuring that the real problems are not addressed in this new national debaucle that is unfolding in front of us. The need for universal health care is obvious, the way that the current administration is trying to implement it is patheitc at best.

-----------------------------------------CONCLUSION:
Each year, if the rates went up, the HMOs never complained. If there was even a slight reduction in the rates, they bitched and complained and called legislators and made a huge stink about things. Ironically a major health care scandal erupted here in the midst of this neverending dog and pony show, and articles on Wall Street pointed out that many state Medicaid HMO rates were in fact too high.

As a general rule, a HMO that is operating ethically should expend 80-85% of its premiums (referred to as a loss ratio) on the delivery of health care and its own administrative operations, leaving 15-20% for profit. So, if a plan is receiving $1,000,000 per month in premiums, then they should be spending $800,000 to $850,000 per month on the delivery of health care to their enrollees. There were plans that had loss ratios of 61%. So, they were obviously hoarding the premiums, and holding back delivery of care, in order to pay the big wigs at the top of the totem pole. That is about as clear an example of how this system is supposed to work, and how it is ultimately abused because of the greed mongering that is so widely accepted as part of the big business/government "partner" relationships that are so deeply ingrained as part of our national and state methods of governance.

Because of the horror at all things government, whether its framed as inefficient or creeping tyranny its always considered the worst possible thing compared with all alternatives.

So called death panels are rationing tools which determine whether or not treatment outcomes justify the costs, for instance would a procedure result in enough quality of life per adjusted anum (Qualis or something like that), its no different a regulatory mechanism than the market and how it prices people out of further services or treatments.

The market just seems natural to Americans and unnatural to Europeans.

You could as easily say could someone explain why people in the UK/EU actually dont think private HC is a good idea? And what on earth is all the talk of people perishing because of health costs.

Surely that sort of system is better as it maximises the cash-lifesavingtreatment ratio and overall improves the lives of everyone?

Or is it scary to americans because its vaguely socialist?

"I'd never die for my beliefs, I might be wrong"

"Is it not enough to see that a garden is beautiful without having to believe there are fairys at the bottom of it too"

"Intelligence is being able to hold too opposing views in the mind at the one time without going crazy" - Now all I need to figure out is if I'm intelligent or crazy!

Surely that sort of system is better as it maximises the cash-lifesavingtreatment ratio and overall improves the lives of everyone?

Or is it scary to americans because its vaguely socialist?

I dont see anything vaguely socialist about it to be honest, although I dont generally deal in any of the popular use of the word socialist as a euphenism for central planning, state intervention or those things.

Its scarey to Americans because whatever a bunch of boardroom execs come up with when they're huddled around a table is fine but if it were a bunch of apparatniks instead its suddenly sinister and all kinds of wrong.

Its never been possible to talk about these things clearly, if its not the left pulling at one set of heart strings its the right wing doing the same with a different set. Economics long ago became an ideology serving the one percent.

National Ramifications:
How does this relate to the national health care debate? Simple.

(1) One of the major inefficiencies in the U.S. private health care system is that insurance companies are allowed to cherry pick their enrollment, and also offer vastly different rates to people depending on which "risk pool" they are signing up for coverage under. For instance, when I was working as a software analyst, for my family of four, I paid $600 per month for HMO coverage. When I got my job with the state, the same coverage, in the same HMO only cost me $200 per month.

How is that possible? The plan is assuming the same risk for my family of four that they did before, but now it is OK to pay them 66% less money per month. The answer is that the software company I worked for only had 150 employees. The state has several thousand employees. So, the HMO bends the little software company over the fence and rapes them with high monthly rates, and must kowtow to the state government and offer them great monthly rates in order to secure the large enrollment of people and make their "bread and butter" revenue.

THIS is part of the probelm that CREATES the UNINSURED POPULATION that this new national health care program is supposedly going to help.

IF HMOs were FORCED TO OFFER ACTUARIALLY SOUND RATES TO PEOPLE REGARDLESS OF THEIR EMPLOYER, THE UNISURED POPULATION IN THE U.S. WOULD BE HALF OF WHAT IT IS OR LESS, BECAUSE INSURANCE WOULD BE AFFORDABLE!!!!

This is the problem of bargaining power. The smaller companies clearly have little in the way of this power, while large organizations have much more of it (this is why workers unionize, for example). I'm not sure offering actuarial rates based on the individual would help, either - most of the people who need health care the most would find themselves priced out of the market for that precise reason. If insurance companies had their way, the only people they would insure would be 25 to 40-year-old white males, simply because they would be the most profitable with the least potential risk.

It's just like you've mentioned - actually paying out benefits runs contrary to an insurance company's best interests.

(2) Personally, I think private health care organizations should be forced to accept rate structures that are calculated out by an actuarially sound methodology, and certified by third party actuaries. This would create equity in what people are charged for their health care expenses. Small companies, Mom and Pop businesses, independent contractors, these are the people that are the backbone of our nation's economy, and they are being forced out of business or forced to live without health insurance, because the costs are simply too high for them to bear. Workers' Compensation insurance (MANDATORY) is crippling to many small businesses. Health insurance is just about as crippling of an expense. If people are not able to receive bassic medical care, then conditions which are ultimately very managebale can become deadly and of catastrophic cost to manage if they are first treated in an emergency room, instead of in the office of a primary care physician.

See above. The idea of insurance cooperatives are an attempt to solve this, by combining those smaller pools into larger ones, with much more bargaining power. Of course, it works the best when there's ONE BIG POOL...

Don't knock worker's comp, either. It sucks, but the alternative, that is, actually having to litigate employees' tort actions, is much more expensive and does nothing but make lawyers richer (and we don't want that, do we?)

(3) I think in principal, univeral health care is the msot desirable delivery system, both for the people and for their government. The insider elitist scum of this nation are ensuring that the real problems are not addressed in this new national debaucle that is unfolding in front of us. The need for universal health care is obvious, the way that the current administration is trying to implement it is patheitc at best.

The problem, as ever, is that the law equates money to free speech.

[/quote]CONCLUSION:
Each year, if the rates went up, the HMOs never complained. If there was even a slight reduction in the rates, they bitched and complained and called legislators and made a huge stink about things. Ironically a major health care scandal erupted here in the midst of this neverending dog and pony show, and articles on Wall Street pointed out that many state Medicaid HMO rates were in fact too high.

As a general rule, a HMO that is operating ethically should expend 80-85% of its premiums (referred to as a loss ratio) on the delivery of health care and its own administrative operations, leaving 15-20% for profit. So, if a plan is receiving $1,000,000 per month in premiums, then they should be spending $800,000 to $850,000 per month on the delivery of health care to their enrollees. There were plans that had loss ratios of 61%. So, they were obviously hoarding the premiums, and holding back delivery of care, in order to pay the big wigs at the top of the totem pole. That is about as clear an example of how this system is supposed to work, and how it is ultimately abused because of the greed mongering that is so widely accepted as part of the big business/government "partner" relationships that are so deeply ingrained as part of our national and state methods of governance.

-Halla[/quote]

The bigger issue is that we conceptualize insurance companies ACTUALLY DOING THEIR JOB and paying out benefits as "loss ratios". This coincides with the greater belief that a business's sole purpose is to suck money out of consumers pockets and hoard that value, instead of recapitalize it. Short-term vs. long-term.

This is the problem of bargaining power. The smaller companies clearly have little in the way of this power, while large organizations have much more of it (this is why workers unionize, for example).

Exactly. That's why I'm for a little "benevolent big brothering" and setting the rates for health care coverage at the state level, by district, age, and gender. There would be no "eligibility" component if a national rate structure were imposed on the private market base. Simply put, people are people, and if you lump everyone together into one massive risk pool, then you will have a true measure of average cost.

Originally Posted by onemoretime

I'm not sure offering actuarial rates based on the individual would help, either - most of the people who need health care the most would find themselves priced out of the market for that precise reason. If insurance companies had their way, the only people they would insure would be 25 to 40-year-old white males, simply because they would be the most profitable with the least potential risk.

Absolutely, I see what you are saying. I did not mean to set rates for each individual, I meant to state "lump everyone together into one massive risk pool" in each state.

Originally Posted by onemoretime

It's just like you've mentioned - actually paying out benefits runs contrary to an insurance company's best interests.

Don't get me started... :steam:

Originally Posted by onemoretime

See above. The idea of insurance cooperatives are an attempt to solve this, by combining those smaller pools into larger ones, with much more bargaining power. Of course, it works the best when there's ONE BIG POOL...

Nice. Yes, you are right, insurance cooperatives are the next best thing to a strong armed approach to levelling the playing field. It's odd that they are not more prevalent. I think everyone is so "trained" to look for health insurance from their employers, and that employers just call insurers directly, that more modern options like coops. are under utilized. I will look into that. Hmmm.....

Originally Posted by onemoretime

Don't knock worker's comp, either. It sucks, but the alternative, that is, actually having to litigate employees' tort actions, is much more expensive and does nothing but make lawyers richer (and we don't want that, do we?)

Hey, you're right, the alternative to workers' comp. majorly sucks, but its a bitter pill to swallow.

I don't mind making lawyers rich as long as they are helping me do the same.

Originally Posted by onemoretime

The problem, as ever, is that the law equates money to free speech.

You're right again. Hold on, I'm getting...

Originally Posted by onemoretime

The bigger issue is that we conceptualize insurance companies ACTUALLY DOING THEIR JOB and paying out benefits as "loss ratios". This coincides with the greater belief that a business's sole purpose is to suck money out of consumers pockets and hoard that value, instead of recapitalize it. Short-term vs. long-term.

Yes, that's the gorilla in the room that no one wants to talk about. This is why it is apparently OK for corporate America to suck the blood out of people year after year. That's why I think the insurance "free market" needs to be flushed, and we need to start over, not keep adding bandage-like programs such as the national health care plan now being considered in Congress, to patch up the scab of a grossly infected wound that our nation has failed to treat for several generations now...

So called death panels are rationing tools which determine whether or not treatment outcomes justify the costs, for instance would a procedure result in enough quality of life per adjusted anum (Qualis or something like that), its no different a regulatory mechanism than the market and how it prices people out of further services or treatments.

Correct, it's the aspect of having that rationing tool. A committee will have to set limits for such-and-such care treatment... That's the basis of the "death panel" idea/claim. Some would call this good, some would call it bad, but that is the root of the contention.

Its scarey to Americans because whatever a bunch of boardroom execs come up with when they're huddled around a table is fine but if it were a bunch of apparatniks instead its suddenly sinister and all kinds of wrong.